- Glencore climbs second day, leading miner gains on metals rise
- Sainsbury leads retailers higher on new profit forecast
European stocks advanced, rebounding from yesterday’s decline, as investors bet that the worst quarter in four years already reflects concerns about weaker economic prospects.
Glencore Plc led commodity producers higher, adding 14 percent as metal prices rose and investors accepted reassurances that it can withstand current market conditions. PSA Peugeot Citroen paced gains in auto-related stocks, rising 6.4 percent, as China said it would halve purchase tax on certain vehicles. Volkswagen AG, which has lost more than a third of its value since admitting to cheating on emission tests, increased 2.7 percent. J Sainsbury Plc led an advance in retailers, soaring 14 percent after saying full-year profit may beat consensus estimates. Tesco Plc rose 7 percent.
The Stoxx Europe 600 Index jumped 2.5 percent to 347.77 at the close of trading. Shares slid yesterday, as concern over a slowdown in Asia and uncertainty over the Federal Reserve’s actions continued to weigh on investor sentiment and stoke volatility. The equity gauge fell 8.8 percent in the third quarter, its worst performance since 2011. It also posted its first back-to-back monthly drop in more than a year. A gauge measuring swings on euro-area stocks is at its highest level since 2011 on a monthly basis, data compiled by Bloomberg show.
“The correction already reflects the slow growth prospects,” said Konstantin Giantiroglou, head of investment advisory and research at Neue Aargauer Bank in Brugg, Switzerland. “There’s still a lot of monetary stimulus out there, so it’s just too early to say the recovery we’ve seen will sharply decelerate and we’ll have lower share prices because growth prospects have become worse. This is not the beginning of a bear market.”
Among stocks active on corporate news, Rio Tinto Group rose 2.8 percent after the world’s second-biggest mining company agreed to sell its 40 percent stake in the Bengalla coal venture in Australia to New Hope Corp. for $606 million. Deutsche Lufthansa AG climbed 6.2 percent after DZ Bank AG raised its rating on the carrier to buy from hold.